User Account

All Pages

What is the firm expected value in one year

Assignment Help Financial Accounting
Reference no: EM132519227

1. The risky portfolio A consists of 1000 shares of BIT PLC and 4000 shares of DIMO PLC. Assume that BIT PLC has a share price of $6, an expected return of 18%, and a standard deviation of 22%. DIMO PLC has a share price of $4, an expected return of 14%, and a standard deviation of 20%. The correlation between the two is 0.6, and the risk-free rate of interest is 8%.

Required

Question a) Graph the Capital Allocation Line derived from the risk-free asset and portfolio A. (Label all axes and points carefully).

Question b) What fraction of your portfolio must you invest in A to have a portfolio standard deviation of 12%?

2. BLUECHIP PLC just paid a dividend of $2.00 per share. The managing director just announced that it is planned to increase dividends at a rate of 6% indefinitely. An appropriate discount rate for this company is 16% per annum.

Question a) What is the firm's expected dividend stream over the next 3 years?

Question b) What is the firm's current stock price?

Question c) What is the firm's expected value in one year?

Question d) What is the expected dividend yield, capital gains yield and total return during the first year?

Reference no: EM132519227

Questions Cloud

How you are going to evaluate the recommendations : This week, discuss how you are going to evaluate the recommendations rather than just saying you will evaluate them. What will you take into consideration?
Calculate the elasticity of substitution : Calculate the elasticity of substitution in this case and elaborate on your answer.
Information technology assignment : Prepare an informational report that explains the issues that Johnnie Leigh should consider when considering the global aspects of her network.
Derive the optimization condition of profit-maximizing : Derive the optimization condition of a profit-maximizing firm that operates in a perfectly competitive markets.
What is the firm expected value in one year : What is the firm's expected dividend stream over the next 3 years? What is the expected dividend yield, capital gains yield and total return during first year?
Discuss the premise of the article is correct : Read this article about Cambridge Analytica in Wired Magazine. Discuss whether you think the premise of the article is correct and that people are more aware.
Derive the labor hiring rule for a profit maximizer firm : Derive the labor hiring rule for a profit maximizer firm in the short-run and give a graphical example to explain your argumenta
Explain the common properties for the points on function : A) Show the derivation of the individual demand function for a utility maximizer consumer and
Evaluate approaches to project planning and implementation : Examine and assess THE industry-based issues/problems/innovations and present solutions/ideas to an individual organisation

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd